Personal Loan Balance Transfers
Learn how balance transfer works in Personal Loans
- Personal Loan Balance Transfer involves moving your existing Personal Loan from one lender to another.
- You can get lower interest rates and extend repayment tenures on Personal Loans.
- Different banks have different rules about the total outstanding amount on Personal Loans to qualify for balance transfers.
- Check the fees and charges associated with Personal Loan Balance Transfer.
- Consider balance transfer if you are dissatisfied with the services offered by your current.
Are you dissatisfied with the high interest rate on your existing Personal Loan? What if you had the option to switch your loan to another bank at a lower interest rate? Most banks and financial institutions now provide a Personal Loan Balance Transfer facility. Let us learn more about how balance transfer works in Personal Loans.
What is Personal Loan Balance Transfer?
Personal Loan Balance Transfer is a facility offered by banks and NBFCs, through which you can transfer your outstanding Personal Loan balance from one lender to another. Earlier, this process was limited to transferring the outstanding balance on your credit card to another service provider. But now, it is extended to Personal Loans, car loans, loans against property, home loans, and other types of loans.
How Balance Transfer Works in Personal Loans
With Personal Loan Balance Transfer, you stand to get a better rate of interest than that on your existing loan. A lower interest rate offers some respite from the EMI burden on your current loan. You can also extend the repayment tenure and consolidate multiple loans into a single loan with balance transfer loans.
To initiate a balance transfer, you must approach a new lender and inform them of your intention to transfer the loan. Based on your current loan repayment behaviour, the lender approves your request. You have to fill a form and submit your documents to complete the process of transferring your Personal Loan to the new lender. Based on your past payment history, the new lender may offer freebies like waivers on the last EMI, zero processing fees, etc. You should consider Personal Loan Balance Transfer if you are dissatisfied with the services provided by your current lender.
Eligibility Criteria for Personal Loan Balance Transfer
- You should be in the age group of 21 to 60 years.
- You should earn a minimum monthly income of INR 20000.
- You should have an existing Personal Loan with another lender.
- You should have paid a minimum of 12 EMIs.
- You should have a clean EMI repayment history of at least 12 months.
- Your CIBIL score should typically be 600+.
Check if you are eligible for a Personal Loan Balance Transfer with the help of a Personal Loan Eligibility Calculator.
Documents Required for Personal Loan Balance Transfer
The documentation requirements of a balance transfer loan are similar to that of applying for a new Personal Loan. The new lender bank will ask you to submit certain essential documents like your PAN Card, Age, ID, address and income proof documents along with proof of your credit score. You must also submit a statement of your current Personal Loan from your current lender.
A Personal Loan Balance Transfer can reduce your EMI burden significantly. While balance transfer is lucrative, you should carefully evaluate the terms and conditions and additional charges associated with the Loan.
Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page
*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.